Canonical and Secret: The dot-com bubble springs two slow leaks

As with the first dot-com bubble, gossip goeth before the fall. The Ubuntu cloud failure doesn't help either

Is it starting? We've all been waiting for it: the next Silicon Valley implosion.

The signs are there: ridiculous amounts of money thrown at barely birthed startups guaranteeing fantastic financials with no real evidence, debauched frat boy entrepreneurs who firmly believe their business plan is worth several billion dollars, and Fox contemplating a reality show starring the antique car hoarders of Mountain View. The most recent indications of a digital doom redux are Canonical shuttering its cloud service and the new online Silicon Valley bitch bin, Secret.

[ 10 signs the dot-com tech bubble is back | Think we're in a tech bubble? It's nothing like 1999 | For a humorous take on the tech industry's shenanigans, subscribe to Robert X. Cringely's Notes from the Underground newsletter and follow Cringely on Twitter. ]

In the '90s, the word "Internet" had magic moneymaking power. You could graduate from a third-rate college with an undergrad degree in comparative medieval socioanthropology. But as long as you walked into the VC's office dressed in black, carried the latest laptop, and sprinkled "Internet" and "website" throughout your business proposal, along with predictions of multi-billion-dollar market caps, you'd walk out with a seven- or eight-figure check.

Next, you'd get a loft office and fill it with motivational posters, sports memorabilia, custom desks, Aeron chairs, foosball tables, and a $5,000 cappuccino machine -- voilĂ , the patented environment for guaranteed success! Hire a bunch of programmers dressed like Sherpas or punk rockers, slap together a v1 website with a beta program tested by bribed relatives, and you were set. Within a few months, you'd get an offer of $250 million in stock for your experiment, with expectations of making a billion dollars within a few years.

Then startups began to fail. Investors started looking for actual cash rather than ephemeral stock valuations. Eighteen months on, a whole segment of Porsche-leasing, no-qualification grad students with titles like Rainmaker, Technology Prince, and Money Catalyst went from behaving like boozy jailbirds to suddenly applying for paralegal posts or barista gigs. Reality hit hard and fast, punched low, and inexplicably took most of those guys -- as well as previously gleeful investors -- by complete surprise.

New magic, same spell

It's starting to happen again. "Cloud," "Web service," and "app" have been the magic words in this bubble. But the frat boy behavior is back with a vengeance, as anyone living in San Francisco will tell you ad nauseum, in the form of nerds trying to look cool by snapping selfies with celebrities paid to attend their parties; business meetings catered by drug dealers and sex workers; and interviews with baked company founders claiming they might buy Google. "Creativity encouraging" offices are back, too, with everything from Oval Office replicas to playground slides.

And those paper-pushing cloud founders who are so technology savvy they'd try using a DNA test to remember their ATM pin codes? They're still riding on the backs of hands-on developers promising them unparalleled technology innovations while actually playing Titanfall and Flappy Bird during the boss's lunchtime "engagements."

A break in the cloud

The failures are beginning, too. A cloud business was considered invulnerable just a few months ago -- everybody was starting one, logic be damned. But Canonical's Ubuntu One is a recent casualty. Was it a good plan to build out a music and media cloud service for a Linux distro aimed at the desktop market, where it has never enjoyed any real presence?

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